Iran 2023. Automotive Industry Stands Over 1 Million Sales Despite Economic Crisis

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The 2024 Peugeot e-2008
The 2024 Peugeot e-2008

Iranian Vehicles Market moderately declined last year. In 2023 the sales were just over 1 million, reporting a sligh 4.9% decline from the previous year.

Car Market Trend and Outlook

Despite maintaining sustained moderate growth in 2022/23 – the Iranian year starts on March 20 – the economy faces entrenched structural challenges. Sluggish and jobless long-term growth, low productivity, high inflation, and imbalances in the banking and pension systems persist. These challenges have compounded long-standing socio-economic grievances that have triggered recent protests.

Ongoing economic sanctions and a dominant public sector hinder the full utilization of Iran’s economic potential, including leveraging a highly educated young population, to further diversify the economy towards non-oil industries and services such as tourism.

High inflation and insufficient job creation disproportionately impact lower-income households. Years of high inflation have negatively impacted poor households and eroded the real value of social assistance transfers. With only around one-third of the population employed and limited job prospects, particularly for the young and female population, labor market challenges persist; this exacerbates inequalities and contributes to a high poverty rate.

The automotive industry is the second most important – after the oil – in the country and in the past, over 15 years ago accounting for over 1.5 million sales per year. However, due to the economic difficulties, sanctions and low pro-capita income, it stands now around 1 million per year.

The industry is controlled by local manufacturers while Chinese OEMs have recently replaced Western companies which left the country after the last sanction tour.

In 2023 the sales were just over 1 million, reporting a sligh 4.9% decline from the previous year.

Medium-Term Market Trend

The Iranian automotive industry would be one of the Top 15 in the World, considering the huge local production and the Iranian rule in the Middle East. However, the diplomatic war against Western countries with reiterated sanctions, have disrupted the industry in the recent years.

Following the 2014 Ginevra agreement, which allow to stop sanctions, the car market boomed over 1.5 million, but when President Trump decided to unilaterally ignore that agreement, reaffirming the sanctions status, the domestic economy was hit and so the car market.

In fact, the market lost volume in double digits in 2018 and 2019, reaching 793,891 total sales by the end of 2019 (-33.5%).

The pandemic didn’t affect vehicle sales in Iran, on the contrary the light vehicle sales surged 14.1% in 2020 to 905,643. In 2021 new vehicle registrations remained relatively flat, but in 2022 the market gained another 15.2% finally rising above the 1 million mark.

Tables with sales figures

In the tables below we report sales for Top Brands

 

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